Brazil currently suffers from a refining shortfall. Petrobras's plans to build the refinery, called Premium 2, have been pushed back to 2017 or 2018 as the company focuses its $237 billion investment plan through 2016 on boosting crude oil production and development of ultra-deepwater offshore fields.

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By PAULO WINTERSTEIN

SAO PAULO -- Brazil's state-controlled oil company Petrobras
said Tuesday it is studying a possible joint venture with South
Korean energy company GS Energy to build a refinery in
northeastern Brazil.

Petrobras and GS Energy last month signed a letter of intent
to study the creation of a joint venture to operate a
premium-fuel refinery, Petrobras said in a regulatory filing.
The companies didn't provide additional details, saying only
that the agreement doesn't obligate either company to commit to
any future investment or partnerships.

Last year, the governor of the state of Ceara, where the refinery could be built, met with GS
Caltex to discuss a possible joint venture. GS Energy was spun
off from GS Caltex in June of last year, according to the
company's website.

Petrobras's plans to build the refinery, called Premium 2, have
been pushed back to 2017 or 2018 as the company focuses its
$237 billion investment plan through 2016 on boosting crude oil
production and development of ultra-deepwater offshore
fields.

Brazil currently suffers from a refining shortfall as domestic
demand for fuels has outpaced refining capacity. Petrobras is in
the process of expanding the country's refining profile, but the first of
the already delayed new refineries isn't expected to be ready
until 2014 at the earliest.

Premium 2 would have installed processing capacity of
300,000 bpd. The Premium 1 refinery, which is also forecast to
start up in 2017 and 2018, would process about 600,000 bpd in
Maranhao state. Petrobras is currently building two new
refineries, Comperj in Rio de Janeiro state and Abreu e Lima in
Pernambuco.

Dow Jones Newswires

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